Jacksonville-based Foundation Financial Group looks for growth, new services in 2011

Mark Basch

Tuesday

Dec 28, 2010 at 4:59 PM

Foundation Financial Group has produced a strong growth record since it was formed in 2004 in Atlanta with eight employees.

The mortgage lending company now headquartered in Jacksonville has about 300 employees in five cities, including more than 70 in Jacksonville. And it made more than $300 million in mortgage loans this year.

"We're probably one of the largest companies that nobody's ever heard of," said Chief Executive Officer Paul Scott.

But the company has laid out an even more ambitious growth plan for 2011. Not only does it hope to grow to 500 employees and $500 million in mortgage loans, it is also expanding its financial services. Starting in January, Foundation will be adding insurance, retirement planning, wealth management and tax services. That could add 50 more employees in Jacksonville.

"We named it Foundation Financial Group for a reason," as opposed to putting "mortgage" in the corporate title, Scott said.

"The vision was always to be a financial services company. I just think it's the time to do it," he said.

The privately-owned company won't reveal financial details, but Scott said profits are now strong enough to absorb potentially two years of losses in its insurance business during its start-up phase.

"In the long term, the value of that will be tremendous," he said. "It's a great payoff down the road if you can afford the squeeze at the beginning."

But whatever happens with the new financial services, Foundation is expecting growth in 2011 from its mortgage business. With offices already operating in Jacksonville, Atlanta, Savannah, Ga., Charlotte, N.C., and Raleigh, N.C., the company next month will open a sixth mortgage lending center in Rochester, N.Y., and it's looking to open offices in Illinois and Texas next year, Scott said. Foundation is licensed to make mortgage loans in 33 states.

Scott said Foundation has a "footprint" in place that makes it easy to expand its operations.

"We now have a system that's organically creating growth," he said.

Foundation doesn't have mortgage loan offices for customers to visit and doesn't really promote itself. Its loans come through outgoing telemarketing calls from employees at the company's offices.

Many of its customers have come from what are known as "trigger leads" that companies can buy from credit reporting agencies. When someone applies for a loan and the information is reported to the credit agencies, it triggers an alert that the home buyer is seeking a loan. Other lenders can buy that home buyer's contact information from the credit agency and use it to call the home buyer.

So Foundation will call potential borrowers who possibly have never heard of the company and see if they can offer a mortgage on better terms. Scott acknowledges that this practice brings some consumer complaints from people who don't want these calls and are leery of an unfamiliar company (complaints that can be found on the Internet with a Google search of Foundation). But he said Foundation is not trying to confuse borrowers and offers conventional loan products that might interest them. And if someone asks the company to not call again, it will oblige, he said.

The company will also offer its new financial services through telemarketing, using its pool of mortgage borrowers as its potential customer base.

Foundation'semployees generally don't have experience in the mortgage industry before joining the company. Foundation deliberately brings in people from outside the industry and trains them in the company's system, with the hope that they will enjoy working for the company.

"The goal was always to train them to stay here," said Executive Vice President Mark Boyer.

"We put so much time and money into our people. It's really a very people-centric company," said Scott.

Scott said the recession has helped the company grow its employment base.

"The talent is immense out there with the economy the way it is," he said.

He also said the recession has helped Foundation's expansion plans, because office vacancy rates are allowing companies to lease space on more favorable terms.

"It allows you to take risks where five years ago you couldn't," he said.

Scott doesn't think Foundation is taking a big risk by expanding into new services. He thinks the company is not "growing for growth's sake" and has not taken on debt or sought new capital to grow.

"I think we're staying true to ourselves," he said.

mark.basch@jacksonville.com, (904) 359-4308

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